The documentation describes the behavior when continuous stock is activated.
Basic setting
Material transaction is posted to the WIP account on issue from the material account.
If the assembly is received, it is posted from the WIP account to the stock account of the assembly. The difference of the amount, that is, the remainder in the WIP account, is posted to the WIP variance account. The difference posting is a separate journal entry made on receipt of the assembly or closure of the work order. This can be optionally configured.
WIP variance value is the calculated cost difference of issued material, costs from time receipt and external operations (depending on the configuration) and the receipt of the assembly.
The evaluation of the assembly depends on the settings in the Configuration Wizard > Production > Valuation and booking of assembly.
The costs of the issued material depends on the evaluation method of the item set in item master data. When the evaluation method of the material is defined as moving average, this price is used for calculating the WIP variance, because this is the value used for journal entry, representing the system-wide evaluation method for items.
The calculation is: costs of receipt assembly - (material costs + costs of time receipt (depending on configuration) + cost of purchase orders for external operations (depending on configuration))
In this example there is no account determined from the warehouse.
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